Unified Payments Interface (UPI), which changes the face of digital payments in India, is once again in the headlines. The National Payments Corporation of India (NPCI) has recently issued some new guidelines which will be applicable from 1 April 2025. The main objective of these rules is to make the UPI transaction more secure and efficient. But does this mean that now UPI users will have to pay additional fees on their transactions?
In this article we will discuss in detail the new rules of UPI, their impact and important information for users. Also, we will also understand whether a new fee is actually being imposed on UPI transactions or it is just a rumor.
What is UPI and new rules since April 1, 2025
UPI is a system that integrates many bank accounts in a mobile application, which makes fund transfer and merchant payment possible immediately. New rules, which come into force from 1 April 2025, try to make this system even better.
| UPI glimpse of new rule |
| Date of implementation: 1 April 2025 |
| Weekly update of database by banks |
| Regular removal of charged mobile numbers |
| It is mandatory to get clear consent from users |
| NPCI submit a monthly report |
| UPI light wallet limit increased |
| UPI 123Pay transaction limit doubles |
| 30% volume cap on third party apps |
New rule of mobile number update
According to NPCI’s new guidelines, banks and payment service providers (PSPs) must update their database regularly. In this, mobile numbers have to be removed which have been disconnected or surrendered.
- Banks will have to update their database every week
- Mandatory removal of framed mobile numbers from the system
- This step will reduce the possibility of transaction on wrong numbers
Provision of clear consent from users
Under the new rules, UPI apps will have to get clear consent from users. This consent is required to seed or port the UPI number.
- It is mandatory to give opt-out options to users
- The process of taking consent should be transparent and non-entered
- Consent cannot be obtained during any transaction
Will UPI transactions be charged additional fees?
This question is in the minds of many UPI users. Let us discuss this issue in detail.
No fee on individual UPI transactions
NPCI has clarified that no fee will be imposed on individual UPI transactions. Whether you are buying grocery or sending money to friends, these transactions will be completely free.
- UPI transfer free between bank accounts free
- No additional fee on merchant payment
- Use UPI for daily needs without any cost
Possibility of fee on some special transactions
However, some special types of transactions may be charged:
- Credit Card Bill Payment: 0.5% to 1% fee on platforms like Google Pay, PhonePe, Paytm
- Prepaid Wallet Transaction: 1.1% interchange fee on merchant transactions of more than ₹ 2,000
- International UPI Transactions: New fees may apply on UPI transactions made abroad
Changes in UPI transaction limit
NPCI has also made some changes in the limit of UPI transactions:
UPI light wallet limit increased
- Old limits: ₹ 2,000
- New limit: ₹ 5,000 (9 October 2024)
- Objective: Easy to make digital transactions of small value easier
UPI 123Pay transaction limit doubles
- Old limit: ₹ 5,000 per transaction
- New limit: ₹ 10,000 per transaction (from 9 October 2024)
- Benefits: High price transactions for feature phone users
New guidelines for banks and UPI apps
NPCI has issued some important guidelines for banks and UPI service providers:
Provision of monthly report
From 1 April 2025, all banks will have to submit a monthly report to NPCI. This report will include:
- Total UPI ID Number
- Number of active users per month
- Transactions done through updated mobile numbers
- Local number-based transactions
Volume cap on third party apps
To prevent monopoly in UPI Ecosystem, NPCI has proposed an important rule:
- 30% volume cap on transactions processed by any single UPI app
- Deadline for implementing this cap: 31 December 2024
- Objective: Promotion of fair competition between third party app provider (TPAP)
Important suggestions for UPI users
In view of the new rules, UPI users should take care of some things:
- Update the mobile number: Check and update the mobile number registered in your bank and UPI app regularly.
- Pay attention to the consent process: Read and understand any consent sought by UPI apps carefully.
- Do not ignore updates: Do not ignore any updates or notifications coming from UPI apps.
- Take care of the transaction limit: Take advantage of the increased boundaries of UPI Light and UPI 123pay, but take precautions.
- Avoid fee transactions: Where possible, avoid special transactions levied or adopt alternative methods for them.
Glimpse of the future of UPI
Many new features are expected with UPI 2.0:
- Voice-based transaction: Transaction facility through voice
- Credit-Linked UPI: Possibility to connect credit card to UPI
- Cross-Border Payments: Ease International Transactions Easy
- AI Integration: Make transactions more secure using artificial intelligence
Effect of UPI: A comprehensive approach
UPI has completely changed India’s digital payment scenario. Let’s look at some of its major effects:
Increase in financial inclusion
- Digital transactions increased in rural and semi-urban areas
- Digital payment became easier for small traders and street vendors
- Improved access to banking services
Cashless economy promoted
- Reduction in cash transactions, increase in digital payment
- Help in tax evasion and black money
- Improvement in transparency of transactions
Disclaimer: This article is only for informative purposes. Although we have tried to provide accurate information, rules and policies can change over time. Please consult your bank or financial advisor before taking any important financial decision. Also, keep checking the latest updates on NPCI and government websites.
